When researching a franchise opportunity, there are a number of resources that potential buyers should consider using, including current franchisees, the Internet and other business professionals. However, a franchisor also has a number of materials that not only will help franchisees get acquainted with the minutiae of being a unit owner, but are also mandatory to be provided to them.

Under the Franchising Code, a number of compulsory disclosure documents are mandatory for the franchisor to provide potential franchisees with to ensure they are making informed decisions. These documents include the Franchise Disclosure Document and the franchise agreement in the form it will be signed and executed.

The FDD provides numerous details on the business experience and history of a select franchise. It can answer such questions as whether or not a franchisor has faced increasing legal troubles, how much a franchisee will have to pay dues and if the franchisee has the option to renew or sell the business at the end of the agreement.

Of equal importance, the FDD includes information about current franchisees, of which Franchising.com suggests that prospective buyers contact as many as possible to ask them a range of question.

For example, prospective franchisees can kick off a conversation by asking current owners about the number of hours they work and if they are earning what they expected they would when starting out. Additionally, current owners should be questioned about franchisor training and support, any past disputes and whether they would still choose to invest in the franchise if they had to choose all over again.

There are also a number of financial items that must be addressed. Franchisees will have access to a system's financial reports for the past two years, and will be able to carefully examine any claims a franchisor has made toward financial earnings.

"For example, if the franchisor claims that $2000 per week could be earned with a billing rate of $50 per hour, it would seem the franchisee would need 40 billable hours to make that amount. However taking into account other factors such as time, costs of travelling, ordering supplies, marketing and account keeping, to actually earn $2000 per week it may actually take 80 billable hours," the website points out.

However, these documents can be complicated for even the most talented business owner to understand, both legally and financially. Many experts encourage potential franchisees to hire an attorney, an accountant or both to help them sort through the information and jargon.

The Liberty Tax Service franchise opportunity is #1 in the tax franchise category of the 2011 Entrepreneur “Franchise 500." Liberty Tax Service is the only tax franchise on the Forbes “Top 20 Franchises to Start.” Our tax franchise is an affordable and viable business choice. Each office provides thorough, computerized tax preparation coupled with superior customer service. For the best small business opportunity in the income tax franchise industry, choose Liberty!

There are many reasons to open a franchise, or a business of any kind. Unless you make your money elsewhere, the most important reason is to have an income stream. Although the many advantages of fran…

Although Liberty Tax® franchise owners come from all walks of life, there are certain professions that also perform really well in the tax industry. Insurance is one of those professions. Successful i…

Read this in 3 min

*Offer Details and Disclosures

*Email your referral’s name, address, phone, and email contact information along with your address, phone, and email to referralteam@libtax.com and our sales staff will contact you. If the referred person buys a franchise and meets the conditions of our internal referral criteria including, but not limited to, completion of required trainings, obtaining a valid Electronic Filing Identification Number (“EFIN”) from the IRS and opening an office in an approved location by January 2, 2018, you may be eligible for a referral fee in the amount of $3,000. Valid 5/10/2017 – 12/20/2017. Additional restrictions may apply.

The franchising information contained in this Web site is not intended as an offer to sell a franchise or the solicitation of an offer to buy a franchise. The following states and provinces regulate the offer and sale of franchises: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin. If you are a resident of one of these states we will not offer or sell you a franchise unless and until we have complied with the applicable presale registration and disclosure requirements in your state. Minnesota state franchise registration number F-4418 and F-3918.

All state information provided, including information regarding state resources, was gathered from third-party sources. Liberty makes no guaranty as to the continued availability of the state resources listed. Nothing herein should be construed to imply that any state endorses this franchise opportunity.